CSX to Curtail Sale of Margin Routes

CSX CEO James Foote signaled this week that the carrier does not plan to sell any more routes other than those already on the market.

Speaking to the Credit Suisse seventh annual Industrials Conference, Foote said selling marginal routes was no longer an effective way for a Class 1 carrier to continue service on a route while reducing labor costs by having a short-line railroad operate it.

He said that is because Class 1 carriers have found other ways to cut costs and become more efficient.

“We’re going to be very, very, very careful before we would ever sell anything,” Foote said.

He added that CSX is seeking to get into new markets and grow its traffic.

CSX had studied listing for sale routes totaling about 4,500 miles of its 8,000-mile network.

That had stemmed from a route review ordered by the late E. Hunter Harrison when he was CSX CEO. Foote took over CSX after Harrison died in December 2017.

The track being offered for sale wasn’t considered part of the railroad’s network.

But in retrospect, Foote said CSX found that short line traffic growth on routes it sold has been nil.

Rather than rely on short-line partners to grow business Foote said CSX wants to do that itself.

None of the major track sales that CSX has closed on to date have involve routes in Ohio.

However, one of the routes that CSX still has on the block is the Marietta Subdivision, which extends from Parkersburg, West Virginia, to near Beverly, Ohio, on former Baltimore & Ohio trackage.

Also for sale are the Cumberland Valley feeder lines east of Corbin, Kentucky.

A portion of a 126-mile line located primarily in Illinois that CSX sold to Watco also included some track in Indiana.

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